GoFundMe Launches Giving Funds to Boost Charitable Giving

GoFundMe has introduced a new product called Giving Funds, a type of donor-advised fund (DAF) designed to streamline and enhance charitable giving. This initiative aims to capitalize on the growing trend of women making financial decisions, including charitable contributions, within their households. Margaret Richardson, GoFundMe’s chief marketing and corporate affairs officer, highlighted that women are increasingly managing household finances and seeking more efficient ways to handle their charitable giving.

Giving Funds allows users to contribute to charitable investment accounts directly on the GoFundMe platform. These funds are tax-advantaged, similar to other investment accounts like 401(k)s or health savings accounts. Contributions to a DAF are tax-deductible, and the funds can be invested and grow tax-free until they are distributed to charities. GoFundMe has partnered with fund managers such as BlackRock, State Street Global Advisors, and Vanguard to offer a range of exchange-traded funds as investment options.

One of the key benefits of using Giving Funds on GoFundMe is the centralization of charitable giving. Users will receive a single annual tax document, and there are no management fees or minimum balances required. This feature makes it easier for users to plan ahead and respond quickly to urgent charitable needs, such as those arising from natural disasters. Richardson noted that this could be particularly beneficial for the site’s 200 million users, who come from diverse backgrounds and income levels.

Despite the niche status of DAFs, which are used by only about 1% of Americans, their popularity is growing. GoFundMe’s introduction of Giving Funds could broaden the appeal of DAFs by making them more accessible to a wider audience. This move aligns with the company’s goal of making charitable giving more seamless and impactful, especially as women are expected to inherit significant wealth in the coming years.